Feds delay new innovation funding agency

It may now be several years before a new Crown corporation starts its work funding innovation in Canada, which could put its fate in the hands of a new government eager to cut costs.

What happened: The federal government pushed the launch for the Canada Innovation Corp. (CIC) to “no later than 2026-27.”

  • There has been difficulty finding someone from the private sector to run the CIC, a government official told The Globe and Mail, as well as typical challenges in building a new agency from the ground up.

Why it matters: Unless the current government beats its new deadline by a significant margin, the CIC won’t be up and running until after the 2025 federal election. That could put the corporation’s existence at risk if a new government is elected and scraps the project.

  • The Conservatives have already targeted the beleaguered Sustainable Development Tech Canada as a way to reduce “waste” if they are elected.

Catch-up: The CIC was going to get $2.6 billion over its first four years to help Canadian businesses innovate. The act creating the CIC received royal assent in June, and the government promised to have it running this year.

  • Part of the CIC’s funding was to come from taking over the Industrial Research Assistance Program, a 70-year-old program that currently gives out $100 million annually to SMBs to support new innovations.

Yes, but: The feds have started on some other innovation-related promises. Recommended improvements to the Business Development Bank of Canada will soon be implemented after a review found the government’s small business funding agency was too risk-averse. Long-awaited consultations to modernize the Scientific Research and Experimental Development tax incentive program will also begin next month.